Budget Travel in Vietnam: Capitalizing on the Depreciating Dong

This article has been reviewed by Wego‘s editorial team to ensure that the content is up to date & accurate.

Vietnam, a country adorned with a rich tapestry of landscapes, has always been a top choice for many travelers. Its diverse beauty is truly captivating, from the limestone karsts of Ha Long Bay to the tranquil beaches of Da Nang and Nha Trang. However, in 2024, the Vietnamese currency, the Dong, has become the second cheapest in the world. This depreciation, a result of various historical, political, and economic factors, is starkly evident when the Dong is compared against the USD.

This significant depreciation of the Vietnamese Dong has opened up a unique opportunity for travelers. It allows them to explore the wonders of this country on a lavish vacation without straining their budget.

In this special piece, Wego delves into numerous strategies that travelers can adopt. These strategies consider the Vietnamese Dong’s depreciation, enabling travelers to plan an economical yet enriching trip to Vietnam.

Vietnam’s economic history and current scenario

A deep dive into Vietnam’s economic history and its current scenario may shed light on the reasons behind the diminished value of its currency in the global market. The Dong, the official currency of Vietnam since 1978, has seen its value decrease significantly due to various factors.

In September 1986, the country grappled with severe inflation that peaked at an alarming rate of around 700%, causing a significant surge in the prices of goods. This was primarily due to ineffective economic planning.

On 14 September 1985, in an attempt to stabilize the economy, the country decided to revalue the Dong, with one new dong being equivalent to ten old dong. Economists anticipated that this revaluation would bolster the value of the currency. However, this move backfired, leaving a lasting impact on the country’s currency that is still felt today. The Asian Economic crisis that began in 1997 further exacerbated the situation.

Despite the ongoing depreciation of the Dong, the Vietnamese government has managed to mitigate the situation by capitalizing on its circumstances and focusing on exports. This strategy has proven effective, given the weaker currency, leading to a moderate amount of depreciation each year. However, on 4 November 2022, the Dong hit an all-time low of VND 24,873 against 1 USD due to the US Federal Reserve’s decision to raise interest rates.

Analysts predict that the currency will continue to devalue this year. This prediction was confirmed on 16 April 2024, when the Dong once again reached an all-time low, trading at VND 25,348 against 1 USD.

Should you convert your currency to Vietnamese Dong now?

The prospect of the Vietnamese Dong’s potential devaluation might prompt you to quickly convert your currency. However, it might be wise to exercise patience.

Analysts at KB Securities Vietnam highlight that the substantial difference in interest rates between loans in USD and VND, coupled with the rise of the US dollar Index and escalating geopolitical tensions, pose significant risks to the future of the USD/VND exchange rate. They further suggest that the State Bank of Vietnam is likely to permit a moderate devaluation of the Dong by maintaining an accommodative monetary policy.

Furthermore, numerous security firms in Vietnam forecast a 1 to 3% depreciation of the Dong this year. If you’re contemplating converting your currency to Dong, postponing the exchange could be advantageous, potentially enabling you to gain considerably more value for your currency.

Should you make your bookings now?

The question of whether to make your bookings now is valid. Postponing your bookings until the dong weakens further could potentially be beneficial. By doing so, you might be able to take advantage of more favorable exchange rates, which could lead to significant savings on accommodations, flights, and various activities throughout your trip to Vietnam.

However, exchange rates are not the only factors to consider when making bookings. Other elements such as deals, tourist seasons, weather conditions, and more also play a crucial role. We will explore these considerations in greater detail in the subsequent sections.

Book cheap flights to Vietnam

 

Hotels

Hotels in Vietnam generally offer lower rates when booked in advance compared to last-minute bookings. This trend could be attributed to the varying tourist seasons across different cities in Vietnam.

Take, for example, the Sedona Suites Hotel, a luxurious five-star establishment in Ho Chi Minh City. There is a noticeable price difference of approximately USD 40 when comparing bookings made in April 2024 to those made in October 2024. 

This discrepancy can be explained by the city’s tourist season, which typically runs from December to April, a period characterized by lower humidity and reduced rainfall. Therefore, planning your hotel bookings per these seasonal variations could result in substantial savings.

In a similar vein, An Lam Retreats, another luxurious five-star hotel situated by the tranquil Saigon River, follows the same pricing pattern. The hotel charges USD 269 for bookings made in late April 2024, but the price drops significantly to USD 218 for bookings made in late October 2024.

This further illustrates the potential savings that can be achieved by aligning your travel plans with the off-peak tourist seasons.

A comparison of overall hotel prices suggests that booking in advance is generally more cost-effective than making last-minute bookings. If your goal is to travel to Vietnam on a budget, it’s also advantageous to avoid peak tourist seasons to sidestep higher accommodation costs. This strategic approach could result in substantial savings, thereby freeing up funds to enhance your experiences and activities during your trip.

Book Your Stay in Vietnam

 

Flights

Flight prices fluctuate due to a myriad of factors, including vacation seasons, fuel prices, geopolitical events, and economic conditions. Despite fares largely returning to pre-pandemic levels, certain routes still exhibit elevated prices.

This can be inferred from the graphs below, which depict the routes from GCC and Indian cities to two major cities in Vietnam.

Riyadh to Hanoi and Ho Chi Minh

 

While there has been a noticeable increase in rates post-pandemic, it would be incorrect to attribute this solely to the pandemic. In both graphs, the prices are comparable to, and sometimes even lower than, those in the pre-pandemic era. Therefore, it’s crucial to consider a range of factors when analyzing flight costs.

In the post-pandemic period, the lowest recorded flight price was USD 363.5 in October 2023. This price dip might be attributed to the onset of the Riyadh Season when travelers might have been less inclined to travel.

Conversely, the highest recorded price was USD 915, observed in June 2023. Interestingly, this period may not have coincided with the peak tourist season. However, the prices of most commodities, excluding flight fares, were at an all-time low. During this time, Hanoi welcomed a significant number of tourists, with 29,000 visitors from India and 984,100 international tourists overall. This influx of tourists could have contributed to the spike in flight prices.

 

Book Cheap Flights from Riyadh to Hanoi

 

 

We can observe an instance where local festivals significantly impacted flight prices. For example, flights from Riyadh to Ho Chi Minh City reached their highest price in December 2023, peaking at USD 677 USD. This price surge is not surprising, considering that December is filled with numerous events in Ho Chi Minh City.

The city hosted several events, such as the 3rd Ho Chi Minh City Tourism Week, The Asia Fashion (Vietnam) Show, The Ao Dai Festival, and many more in December 2023.

On the other hand, the lowest price dip occurred in February 2023, with flights priced at USD 342. This price decrease could be attributed to unfavorable weather conditions during that period.

 

Book Cheap Flights from Riyadh to Ho Chi Minh

 

Dubai to Hanoi and Ho Chi Minh

 

The analysis of flights from Dubai to Hanoi offers an interesting perspective. The highest and lowest price peaks occurred in September-October, albeit in 2019 and 2023, respectively. This pattern could be attributed to a variety of factors.

For instance, in 2023, Hanoi hosted numerous events to attract visitors, coinciding with favorable weather conditions. This confluence of factors could have influenced the observed flight price trends.

 

Book Cheap Flights from Dubai to Hanoi

 

 

The flight prices from Dubai to Ho Chi Minh display a notably unstable trend. Two significant peaks are observed, one from May to June 2019 and the other in February 2024. These periods coincide with the city’s warmer seasons, which may draw a large number of travelers looking for a respite from colder climates.

 

Book Cheap Flights from Dubai to Ho Chi Minh

 

New Delhi to Hanoi and Ho Chi Minh

 

The Delhi-Hanoi flight route, similar to the Riyadh-Hanoi route, showcases one of its highest price peaks in May 2023. This period aligns with a more feasible time for budget travel. During this month, Hanoi welcomed 29,000 visitors from India, coinciding with the holiday season in India when most government offices, schools, and colleges are closed for vacation.

March 2019 marks the onset of India’s holiday season and is associated with the highest recorded flight prices. In stark contrast, August 2023 saw the lowest price at USD 133.2. Despite August being a month of significant celebrations in India, including Independence Day and Ganesh Chaturthi, it is not a popular month for long-distance travel due to school exams and work commitments. As a result, airlines may have offered lower flight prices to attract more travelers.

 

Book Cheap Flights from New Delhi to Hanoi

 

Wego price data for one-way flight tickets from New Delhi to Ho Chi Minh CityAccording to the data, the maximum flight price on this route post-pandemic was recorded in March 2023 at USD 269, which is also the start of the holiday season in India.

The lowest price dip occurred in November 2019, when New Delhi experienced its third warmest November on record, with two cyclones bringing substantial rainfall to the city. These conditions likely deterred people from traveling. Interestingly, despite the ongoing summer break in India, current prices are nearly at an all-time low. This presents an excellent opportunity for travelers to plan a delightful vacation in Vietnam.

 

Book Cheap Flights from New Delhi to Ho Chi Minh

 

The perfect time to explore Vietnam

Vietnam, a country that boasts a harmonious blend of stunning landscapes, is characterized by its layered cities and ethnic diversity. These features have made it a global attraction for travelers. Each city in Vietnam offers visitors a unique experience, with its distinct charm that is particularly highlighted during different weather conditions.

The peak tourist season in Northern Vietnam, which includes beautiful cities like Hanoi and Halong Bay, typically runs from October to April. On the other hand, Central Vietnam, which is home to cities such as Hue and Da Nang, sees its peak tourist influx from January to August.

With the VND hitting a record low against the USD, travelers have an extraordinary opportunity. This economic trend allows for indulgence in Vietnam’s luxury experiences at a more affordable rate. So, whether a compelling deal appears or a spontaneous desire to explore Vietnam emerges, remember that your budget can stretch further in this captivating country. It’s the perfect time to immerse yourself in Vietnam’s rich cultural tapestry and breathtaking landscapes without financial stress.